Pursuing Pirates

Everyone knows that piracy of digital content is a serious issue. But it has been notoriously difficult to get a handle on just how widespread the practice has become. Now a new report from the International Intellectual Property Alliance—a coalition of film studios, video game publishers, and other copyright-based industries—gives us a clearer picture of just how enormous the problem really is and what steps can be taken to get the situation under control.

The IIPA’s analysis is contained in a Special 301 filing prepared for the US Trade Representative’s annual report to President Bush. It finds that many forms of content theft-including factory copying of disks, cartridge counterfeiting, and Internet downloading-contribute to piracy levels exceeding 90 percent in many parts of the world.

Moreover, the new report estimates that in all countries, including the US, revenues lost from piracy last year reached more than $25 billion. What’s more, these figures underestimate true totals because they do not account for Internet piracy, which could not be tracked accurately enough even to hazard an estimate, and because they are based on pirate prices as opposed to those at which legitimate sales might occur.

Despite such staggering losses, some contend that no one is really harmed by piracy. But the reality is that everyone loses, except the pirates, according to Stevan Mitchell, vice president for intellectual property policy at the Entertainment Software Association, which represents the video game industry. When pirated copies are sold, the revenue does not go to the digital artists, developers, and producers, says Mitchell. Nor is it funneled into R&D to improve the next generation of content for end users.

What should content developers do to attack this problem? One answer would simply be to develop better pirate-fighting technologies. In fact, the gaming industry, which has been among the most proactive on this front, builds copy-protection measures into video game consoles and embeds corresponding access codes into the software.

Of course, technologies designed to circumvent such protections-mod chips, game enhancers, game copiers, and similar devices-inevitably find their way into the mainstream. Thus, legal reform and anti- piracy enforcement measures are also essential deterrents. But the effectiveness of any such methods depends on input from those at the front lines.

Therefore, the most straightforward way to join the effort, says Mitchell, is to contact your industry trade association-the Entertainment Software Association, the Motion Picture Association of America, the Independent Film & Television Alliance, and so forth. These organizations maintain enforcement programs, and hearing from industry members helps them target programs more effectively. They can also put you in touch with lawmakers so you can weigh in on important legal reforms. And they can take action through the US government and multilateral organizations or directly with the offending countries’ governments.

Conventional wisdom says that the best way to expand any market is to be ever more innovative. And so far, the computer graphics industry, one of the most innovative in history, has thrived on that principle. But now its members need to get more involved to help stop pirates from stealing their work. Otherwise, they may end up spinning their creative wheels ever faster only to fall further behind.